The concern over aircraft damage history is two-fold: There’s the impact that damage history has on an aircraft operationally, and the impact on resale value. Following, Jet Tolbert discusses how aircraft buyers can protect themselves from these…
There are some common pitfalls regarding aircraft damage that unwary buyers can walk right in to. There are also protective measures that can be taken to help avoid these. Firstly, a buyer needs to take a pragmatic approach.
Past Damage Impact on Future Operations?
If the aircraft you’re considering buying has past repair history, does that history have any potential to increase the requirements for maintenance, downtime and costs going forwards?
Let’s imagine an aircraft previously suffered the effects of hail damage. If the aircraft had parts removed and replaced by a factory-owned/authorized service center, the chances are that it would have no impact on the future maintenance costs and will not require any additional maintenance inspections specific to those repairs.
On the other hand, maybe there were some more significant repairs required, or repairs undertaken outside of the factory-owned/authorized center which required specialist engineering, and/or installation of additional parts like ‘doublers’ that provide increased structural integrity to the airframe.
Though often these repairs are done correctly, and the integrity of the aircraft is as good (if not better) than the original design, this should still be confirmed prior to purchase.
Sometimes previous repairs require ongoing, recurrent inspection to verify their integrity and that of the surrounding area – and this will impact the buyer in their future operations. A thorough review of an aircraft’s historical records should be undertaken to establish and any potential exposure to you during your ownership period of the aircraft.
Past Damage Impact on Future Value
The second, but equally pragmatic concern for buyers is that past repairs could impact the value of the aircraft when the buyer comes to resell the aircraft in the future. After all, the aircraft’s history will have to be disclosed to the next owner as part of the sale.
Aside from any misgivings about buying an airplane with damage history, a purchaser should consider how the market has been reacting to the varying degrees of repairs that an aircraft may have.
As an example, if a review of market transactions shows that only aircraft in pristine condition with no prior incidents or repairs have been selling, then you may want to reconsider buying an airplane with damage history – or at least do so with the understanding that you will have to motivate buyers somehow when it comes time to resell the airplane later.
On the other hand, if the market has been fluid with similar aircraft trading regularly at a clear price-point then the key issue for the buyer is going to be paying a fair price. An experienced acquisition broker will advise you on all these points, informing you of all the circumstances surrounding an aircraft’s history and how they will affect your usage and future resale.
From ‘Not All Bad’ to ‘Deal-Killer’
Essentially, all aircraft have repair history of some kind. It’s not all bad - but sometimes it can be a deal-killer. Considering that an aircraft purchase is a lengthy process with many twists and turns it is surely wise to be well informed.
Aircraft damage history can be a steep learning curve. Unfortunately, sometimes, the lessons aren’t fully realized until after the aircraft has been purchased, or much time and money has been invested in a transaction that unravels.
A well-selected, experienced acquisition team can ensure the right questions are asked to keep you up to speed and able to make the best buying decision, based on the resale market conditions.
It is essential to have the information you need up front. Being aware of an aircraft’s history early in the process will prevent some serious headaches later.